Tesla Chief Executive Elon Musk and other billionaires have pledged to hand out SpaceX shares and cash to millions of American children, saying they want to help young people build assets at a time when the spread of artificial intelligence and the concentration of wealth have fueled resentment toward the ultra-rich. Critics counter that the giveaways serve as a vehicle for expanding political influence and cutting tax bills.
Musk said this week that he would give about $150 (198,200 won) worth of SpaceX stock to millions of U.S. children, the Wall Street Journal reported on the 24th. Dell Technologies Chief Executive Michael Dell and his wife, along with hedge fund investor Ray Dalio, have also stepped in to support the "Trump accounts" introduced by the Trump administration.
Locked Until 18: 70 Million Trump Accounts Opened
Trump accounts are investment accounts structured like individual retirement accounts (IRAs) for children under 18. Anyone can contribute, but no withdrawals are allowed until the account holder turns 18. The government provides $1,000 per child for those born between 2025 and 2028. The aim is to build seed money that children can use for tuition or a home purchase once they reach adulthood. About 70 million accounts have been opened so far, according to the White House.
The Dells plan to deposit $250 (about 330,000 won) each into the accounts of 25 million children under the age of 10, focusing on low-income neighborhoods. The amount marks the 250th anniversary of American independence.
The Trump account was first conceived by Brad Gerstner of investment firm Altimeter Capital. Watching stock indexes set record highs even as the COVID-19 pandemic drove up unemployment and economic anxiety, he concluded that children should also share in the gains from market growth. He initially pitched the idea to the Biden administration but made little headway, and it was adopted after President Donald Trump returned to office.
Goodwill or Calculation? Political Clout and Tax Breaks in Question
The wave of billionaire giving coincides with souring public opinion toward the technology industry. Wealth held by the top 0.1% has more than doubled since 2019, according to the U.S. Federal Reserve. In a YouGov survey in May, 62% of American adults said billionaires should have less political, economic and cultural influence. The share of Americans with a positive view of the tech industry fell to 48% recently from 75% in 2017, according to Gallup.
Concerns that AI will displace jobs, local opposition to data center construction and the side effects of social media have added to the industry's image problem. Nine of the 10 richest people in the United States come from the technology sector, drawing added attention to their donations.
The fact that the giving flows through accounts bearing the president's name has also stirred political debate. Trump can tout the program as a policy achievement ahead of next month's midterm elections, while the wealthy donors can strengthen their ties with the White House. Olivier Zunz, a historian of philanthropy, said both the introduction and the timing of the program are strongly political in character.
Others question whether giving that bypasses established nonprofits is the best approach. Phil Buchanan, president of the Center for Effective Philanthropy, noted that distrust of nonprofits has deepened and that funding cuts by the Department of Government Efficiency (DOGE), which Musk once led, have left many organizations fighting for survival. Giving stock to children may be positive in itself, he said, but whether it is the most needed form of giving right now deserves scrutiny.
The tax benefits available to billionaires are another point of contention. Ray Madoff, a professor at Boston College Law School, said donating SpaceX shares that have risen sharply in value allows donors to avoid capital gains taxes on a sale while also claiming an income deduction for the donated amount.
Musk, however, has not disclosed specifics such as when or how the shares would be distributed, leaving it unclear whether the pledge will translate into an actual transfer of assets.